Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included under Item 1 of this Quarterly Report on Form 10-Q and our audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024.

Outlook

Our first quarter results were achieved against the backdrop of a challenging macroeconomic environment for the housing market. We adhered to our strategy and focus on driving consistent volume and growth by matching sales and production pace and using our margin as our shock absorber. Mortgage interest rates have remained higher for longer than we expected, which has left the overall housing market weaker for longer than expected. There remains a housing deficit and actionable demand is limited by affordability and credit, which remain challenged by limited funds for a down payment as well as insufficient homebuyer income to meet qualification requirements for mortgages. Even where household income indicates an approvable mortgage qualification, elevated personal debt levels have often presented an impediment to mortgage access. Until recently, consumers have been generally confident that they will remain employed and that their compensation is secure. However, more recently, even that security has been called into question. While there continues to be a considerable number of customers looking at homes, the urgency to purchase homes remains tepid.

Against this backdrop, our strategy has remained clear. Operationally, it is to build and deliver consistent volume to maximize efficiencies, while financially, it is to drive our asset-light, land-light focus to build cash flow. Now that we have completed our Millrose spin-off, we have intensified our focus on each. We have two focuses in our operating strategy.

First, we focus on maintaining a consistent volume of production and matching our sales pace to our production pace. This allows us to maximize efficiencies in construction costs, and cycle time, in S,G&A expenses and in all elements of marketing and sales. It also delivers a consistent and even-flow volume to our trade partners so they can be more efficient and deliver cost savings to us. By matching our sales pace and our production pace, we avoid building up inventory of finished homes or developed homesites, which efficiently converts production to cash.

Our second focus is our asset-light configuration. The Millrose spin-off completed the backbone of that effort. With Millrose operational, we have a strong complement of land bank partners that undertake land acquisition and land development and provide just-in-time delivery of finished homesites that enables us to act almost entirely as a manufacturer of homes. As with all of our trade partners, our land partners will benefit from our consistent and predictable volume, which will be reflected in reduced costs to us.

To date, tariffs have had no impact on our costs. However, we have recently been discussing the potential impact of tariffs with our supply chain, including working on alternative sourcing strategies and preparing our trade partners to absorb potential increases in their costs due to tariffs. Similarly, to date we have encountered no labor disruptions due to immigration enforcement policies.

In summary, the housing market has softened as affordability and consumer confidence have limited actionable demand. Incentives have been increasing, and net housing prices seem to be moderating. At very least, housing will not be contributing to inflationary pressures, and while demand is constrained, supply is equally limited.

We expect to sell in the second quarter of 2025 between 22,500 and 23,500 homes and to deliver between 19,500 and 20,500 homes. We expect our margin to be approximately 18%, depending on market conditions. We are focused on driving sales and closings to create strong cash flow, even at reduced profitability, while maintaining properly sized inventory levels, so that as market conditions stabilize or improve, we will benefit from normalized margins across our volume.

While the short-term road ahead may still seem choppy, we are optimistic about the longer-term outlook. We have continued to drive production to meet the housing shortage that we know persists across the markets. As and when homebuyer interest normalizes, we believe pent-up demand will be activated and our margins will quickly recover. As we complete our asset-light transformation, we expect to continue to generate cash flow which we can return to stockholders through dividends and stock buybacks, while continuing to pursue strategic growth.

(1) Results of Operations

Overview

We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the three months ended February 28, 2025 are not necessarily indicative of the results to be expected for the full year. Our homebuilding business is seasonal in nature and generally reflects higher levels of new home order activity in our second and third fiscal quarters and increased deliveries in the second half of our fiscal year. However, a variety of factors can alter seasonal patterns.

Our net earnings attributable to Lennar were $519.5 million, or $1.96 per diluted share, in the first quarter of 2025, compared to net earnings attributable to Lennar of $719.3 million, or $2.57 per diluted share, in the first quarter of 2024. Excluding mark-to-market losses on technology investments, first quarter net earnings attributable to Lennar in 2025 were $566.7 million, or $2.14 per diluted share, compared to first quarter net earnings attributable to Lennar in 2024 were $723.3 million or $2.58 per diluted share.

Financial information relating to our operations was as follows:

			Three Months Ended February 28, 2025
(In thousands)			Homebuilding						Financial Services						Multifamily						Lennar Other						Corporate						Total
Revenues:
Sales of homes			$	7,240,546					—						—						—						—						7,240,546
Sales of land			35,326						—						—						—						—						35,326
Other revenues			7,998						277,077						63,196						7,402						—						355,673
Total revenues			7,283,870						277,077						63,196						7,402						—						7,631,545
Costs and expenses:
Costs of homes sold			5,888,144						—						—						—						—						5,888,144
Costs of land sold			36,077						—						—						—						—						36,077
Selling, general and administrative expenses			615,739						—						—						—						—						615,739
Other costs and expenses			—						133,594						73,376						23,564						—						230,534
Total costs and expenses			6,539,960						133,594						73,376						23,564						—						6,770,494
Equity in earnings (losses) from unconsolidated entities			35,004						—						727						(2,497)						—						33,234
Other income (expense), net and other gains (losses)			30,359						—						9,430						(8,121)						—						31,668
Lennar Other realized and unrealized losses from technology investments			—						—						—						(62,503)						—						(62,503)
Operating earnings (loss)			$	809,273					143,483						(23)						(89,283)						—						863,450
Corporate general and administrative expenses			—						—						—						—						147,378						147,378
Charitable foundation contribution			—						—						—						—						17,834						17,834
Earnings (loss) before income taxes			$	809,273					143,483						(23)						(89,283)						(165,212)						698,238

			Three Months Ended February 29, 2024
(In thousands)			Homebuilding						Financial Services						Multifamily						Lennar Other						Corporate						Total
Revenues:
Sales of homes			$	6,901,781					—						—						—						—						6,901,781
Sales of land			20,752						—						—						—						—						20,752
Other revenues			8,458						249,720						129,677						2,542						—						390,397
Total revenues			6,930,991						249,720						129,677						2,542						—						7,312,930
Costs and expenses:
Costs of homes sold			5,395,532						—						—						—						—						5,395,532
Costs of land sold			14,017						—						—						—						—						14,017
Selling, general and administrative expenses			567,987						—						—						—						—						567,987
Other costs and expenses			—						118,424						132,667						9,088						—						260,179
Total costs and expenses			5,977,536						118,424						132,667						9,088						—						6,237,715
Equity in losses from unconsolidated entities			13,302						—						(12,606)						(31,241)						—						(30,545)
Other income (expense), net and other gains (losses)			62,039						—						(43)						3,376						—						65,372
Lennar Other unrealized losses from technology investments			—						—						—						(5,137)						—						(5,137)
Operating earnings (loss)			$	1,028,796					131,296						(15,639)						(39,548)						—						1,104,905
Corporate general and administrative expenses			—						—						—						—						157,321						157,321
Charitable foundation contribution			—						—						—						—						16,798						16,798
Earnings (loss) before income taxes			$	1,028,796					131,296						(15,639)						(39,548)						(174,119)						930,786

Three Months Ended February 28, 2025 versus Three Months Ended February 29, 2024

On February 10, 2025, we completed our acquisition of Rausch Coleman Homes. The results of operations include activity related to Rausch Coleman Homes from February 10, 2025 to February 28, 2025. Prior year information includes only stand-alone data for Lennar Corporation for the three months ended February 29, 2024.

Revenues from home sales increased 5% in the first quarter of 2025 to $7.2 billion from $6.9 billion in the first quarter of 2024. Revenues were higher primarily due to a 6% increase in the number of home deliveries, partially offset by a 1% decrease in the average sales price of homes delivered. New home deliveries increased to 17,834 homes in the first quarter of 2025 from 16,798 homes in the first quarter of 2024. The average sales price of homes delivered was $408,000 in the first quarter of 2025, compared to $413,000 in the first quarter of 2024. The decrease in average sales price of homes delivered in the first quarter of 2025 compared to the same period last year was primarily due to continued weakness in the market.

Gross margins on home sales were $1.4 billion, or 18.7% (18.8% excluding purchase accounting of $7.8 million), in the first quarter of 2025, compared to $1.5 billion, or 21.8%, in the first quarter of 2024. During the first quarter of 2025, gross margins decreased due to an increase in land costs year over year, as well as a decrease in revenue per square foot, which was partially offset by a decrease in construction costs as we continue to focus on construction cost savings.

Selling, general and administrative expenses were $615.7 million in the first quarter of 2025, compared to $568.0 million in the first quarter of 2024. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 8.5% in the first quarter of 2025, from 8.2% in the first quarter of 2024, primarily due to an increase in marketing and selling expenses.

During the three months ended February 28, 2025, our homebuilding operating earnings included $23.2 million of interest income, compared to $57.6 million of interest income in the three months ended February 29, 2024.

Operating earnings for the Financial Services segment were $142.9 million in the first quarter of 2025, compared to $130.6 million in the first quarter of 2024. The increase in operating earnings was primarily due to higher volume from increased Lennar deliveries.

The Multifamily operations were breakeven in the first quarter of 2025, compared to an operating loss of $15.5 million in the first quarter of 2024. Operating loss for the Lennar Other segment was $89.3 million in the first quarter of 2025, compared to an operating loss of $39.5 million in the first quarter of 2024. The Lennar Other operating loss for the first quarter of 2025 was primarily due to losses on our technology investments.

In the first quarter of 2025 and 2024, we had tax provisions of $169.5 million and $210.9 million, which resulted in an overall effective income tax rate of 24.6% and 22.7%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by tax credits. The increase in the effective tax rate from the prior year for the first quarter of 2025 was primarily due to a decrease in excess tax benefits from share-based compensation and a decrease in solar tax credits.

Homebuilding Segments

At February 28, 2025, our reportable Homebuilding segments and Homebuilding Other are outlined in Note 3 of the Notes to Condensed Consolidated Financial Statements. The following tables set forth selected financial and operational information related to our homebuilding operations for the periods indicated:

Selected Financial and Operational Data

			Three Months Ended February 28, 2025
			Gross Margins																		Operating Earnings (Loss)
($ in thousands)			Sales of Homes Revenue						Costs of Sales of Homes						Gross Margin %						Net Margins (Loss) on Sales of Homes (1)						Gross Margins (Loss) on Sales of Land						Other Revenues						Equity in Earnings (Losses) from Unconsolidated Entities						Other Income, net						Operating Earnings
East			$	1,627,897					1,278,646						21.5		%				188,049						72						2,735						6,638						25,128						222,622
Central			1,557,554						1,269,983						18.5		%				134,263						(1,901)						854						(3)						2,239						135,452
South Central			1,160,523						946,529						18.4		%				119,172						2,664						701						(2)						(452)						122,083
West			2,888,685						2,386,679						17.4		%				299,625						(1,586)						1,248						(28)						(478)						298,781
Other (2)			5,887						6,307						(7.1)		%				(4,446)						—						2,460						28,399						3,922						30,335
Totals			$	7,240,546					5,888,144						18.7		%				736,663						(751)						7,998						35,004						30,359						809,273

			Three Months Ended February 29, 2024
			Gross Margins																		Operating Earnings (Loss)
($ in thousands)			Sales of Homes Revenue						Costs of Sales of Homes						Gross Margin %						Net Margins (Loss) on Sales of Homes (1)						Gross Margins (Loss) on Sales of Land						Other Revenues						Equity in Earnings from Unconsolidated Entities						Other Income (Expense), net						Operating Earnings
East			$	1,862,885					1,342,969						27.9		%				346,339						5,263						2,311						7,097						15,899						376,909
Central			1,440,429						1,155,758						19.8		%				150,334						(421)						886						16						10,808						161,623
South Central			1,070,159						831,873						22.3		%				161,594						1,042						612						—						5,335						168,583
West			2,521,491						2,055,622						18.5		%				287,062						851						1,644						2,477						16,753						308,787
Other (2)			6,817						9,310						(36.6)		%				(7,067)						—						3,005						3,712						13,244						12,894
Totals			$	6,901,781					5,395,532						21.8		%				938,262						6,735						8,458						13,302						62,039						1,028,796

(1)Net margins on sales of homes include selling, general and administrative expenses.

(2)Negative gross and net margins were due to period costs and/or impairments in Urban divisions that impact costs of homes sold without sufficient sales of homes revenue to offset those costs.

Summary of Homebuilding Data

Deliveries:

			First Quarter
			2025						2024						2025						2024						2025						2024
			Homes												Dollar Value (In thousands)												Average Sales Price
East			4,311						4,583						$	1,668,880					1,905,846						$	387,000					416,000
Central			4,029						3,701						1,557,555						1,440,429						387,000						389,000
South Central			4,730						4,263						1,160,523						1,070,159						245,000						251,000
West			4,756						4,238						2,888,685						2,521,491						607,000						595,000
Other			8						13						5,886						6,817						736,000						524,000
Total			17,834						16,798						$	7,281,529					6,944,742						$	408,000					413,000

Of the total homes delivered listed above, 80 homes with a dollar value of $41.0 million and an average sales price of $512,000 represent home deliveries from unconsolidated entities for the three months ended February 28, 2025, compared to 77 home deliveries with a dollar value of $43.0 million and an average sales price of $558,000 for the three months ended February 29, 2024.

Sales Incentives (1):

			First Quarter
						2025						2024						2025						2024
						Average Sales Incentives Per Home Delivered												Sales Incentives as a % of Revenue
East						$	67,400					46,500						14.9		%				10.1		%
Central						50,600						46,500						11.6		%				10.7		%
South Central						58,400						54,900						19.2		%				18.0		%
West						65,300						54,200						9.7		%				8.4		%
Other						97,300						89,300						11.7		%				14.6		%
Total						$	60,600					50,600						12.9		%				10.9		%

(1) Sales incentives relate to home deliveries during the period, excluding deliveries by unconsolidated entities.

New Orders (2):

			First Quarter
			2025						2024						2025						2024						2025						2024						2025						2024
			Active Communities												Homes												Dollar Value (In thousands)												Average Sales Price
East			330						284						3,974						4,383						$	1,526,559					1,851,718						$	384,000					422,000
Central			447						340						4,639						4,417						1,835,498						1,764,896						396,000						400,000
South Central			387						233						4,921						4,431						1,172,861						1,119,999						238,000						253,000
West			418						368						4,811						4,927						2,888,650						2,996,239						600,000						608,000
Other			2						2						10						18						7,164						9,530						716,000						529,000
Total			1,584						1,227						18,355						18,176						$	7,430,732					7,742,382						$	405,000					426,000

Of the total homes listed above, 101 homes with a dollar value of $59.9 million and an average sales price of $593,000 represent homes in 11 active communities from unconsolidated entities for the three months ended February 28, 2025, compared to 46 homes with a dollar value of $25.2 million and an average sales price of $548,000 in six active communities for the three months ended February 29, 2024.

(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three months ended February 28, 2025 and February 29, 2024.

We experienced cancellation rates in our Homebuilding segments and Homebuilding Other as follows:

			First Quarter
			2025						2024
East			16		%				16		%
Central			11		%				11		%
South Central			16		%				17		%
West			11		%				11		%
Other			23		%				5		%
Total			14		%				14		%

Backlog:

			First Quarter
			2025 (1)						2024						2025						2024						2025						2024
			Homes												Dollar Value (In thousands)												Average Sales Price
East			2,999						6,310						$	1,333,063					2,632,787						$	445,000					417,000
Central			4,045						3,949						1,684,706						1,722,219						416,000						436,000
South Central			3,027						2,063						725,427						525,781						240,000						255,000
West			3,071						3,940						2,021,262						2,547,090						658,000						646,000
Other			3						8						1,626						4,241						542,000						530,000
Total			13,145						16,270						$	5,766,084					7,432,118						$	439,000					457,000

Of the total homes in backlog listed above, 100 homes with a backlog dollar value of $82.7 million and an average sales price of $827,000 represent the backlog from unconsolidated entities at February 28, 2025, compared to 116 homes with a backlog dollar value of $57.5 million and an average sales price of $495,000 at February 29, 2024.

(1) As of February 28, 2025, backlog includes 980 homes acquired in connection with the Rausch Coleman Homes acquisition. Of the homes in backlog, 214 and 766 homes were in the Central and South Central homebuilding segments, respectively. As of February 28, 2025, backlog also includes 11 homes acquired from a small builder in the West homebuilding segment.

Backlog represents the number of homes under sales contracts. Homes are sold using sales contracts, which are generally accompanied by sales deposits. In some instances, purchasers are permitted to cancel sales contracts if they fail to qualify for financing or under certain other circumstances. Various state and federal laws and regulations may sometimes give purchasers a right to cancel contracts homes in backlog. We do not recognize revenue on homes under sales contracts until the sales are closed and title passes to the new homeowners.

Three Months Ended February 28, 2025 versus Three Months Ended February 29, 2024

Homebuilding East: Revenues from home sales decreased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to a decrease in both the average sales price of homes delivered and the number of home deliveries in all the states in the segment except in New Jersey, which was partially offset by an increase in the average sales price of homes delivered and the number of home deliveries in New Jersey. The decrease in the average sales price of homes delivered in Florida and Pennsylvania was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in New Jersey was primarily due to product mix. The decrease in the number of home deliveries in Florida and Pennsylvania was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The increase in the number of home deliveries in New Jersey was primarily due to an increase in the number of active communities. In the first quarter of 2025, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, gross margin percentage of home deliveries decreased year over year.

Homebuilding Central: Revenues from home sales increased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to an increase in the number of home deliveries in all the states in the segment except in Maryland, Minnesota and South Carolina, which was partially offset by a decrease in the average sales price of homes delivered in Alabama, Georgia, North Carolina, South Carolina and Virginia. The increase in the number of home deliveries in Alabama, Georgia, Illinois, Indiana, North Carolina, Tennessee and Virginia was primarily due to an increase in the number of active communities including communities acquired from Rausch. The decrease in the number of home deliveries in Maryland, Minnesota and South Carolina was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The decrease in the average sales price of homes delivered in Alabama, Georgia, North Carolina, South Carolina and Virginia was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in Illinois, Indiana, Maryland, Minnesota and Tennessee was primarily due to product mix. In the first quarter of 2025, an increase in revenues per square foot and a decrease in costs per square foot was more than offset by an increase in land costs per square foot. Overall, the gross margin percentage of home deliveries decreased year over year.

Homebuilding South Central: Revenues from home sales increased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to an increase in the number of home deliveries in all states in the segment, which was partially offset by a decrease in the average sales price of homes delivered. The increase in the number of home deliveries was primarily due to an increase in the number of active communities including communities acquired from Rausch. The decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of incentives and product mix. In the first quarter of 2025, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries decreased year over year.

Homebuilding West: Revenues from home sales increased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to an increase in the number of home deliveries in all the states in the segment except in Colorado, Nevada and Oregon, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in California and Idaho. The increase in the number of home deliveries in Arizona, California, Idaho, Utah and Washington was primarily due to an increase in the number of active communities and deliveries per active community. The decrease in the number of home deliveries in Colorado, Nevada and Oregon was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The decrease in the average sales price of homes delivered in Arizona, Colorado, Nevada, Oregon, Utah and Washington was primarily due to pricing to market through an increased use of incentives. The increase in the average sales price of homes delivered in California and Idaho was primarily due to product mix. In the first quarter of 2025, an increase in revenues per square foot and a decrease in costs per square foot were more than offset by an increase in land costs per square foot. Overall, the gross margin percentage of home deliveries decreased year over year.

Financial Services Segment

Our Financial Services reportable segment provides mortgage financing, title and closing services primarily for buyers of our homes. The segment also originates and sells into securitizations commercial mortgage loans through its LMF Commercial business. Our Financial Services segment sells substantially all of the residential loans it originates within a short period in the secondary mortgage market, the majority of which are sold on a servicing released, non-recourse basis. After the loans are sold, we retain potential liability for possible claims by purchasers that we breached certain limited industry-standard representations and warranties in the loan sale agreements.

The following table sets forth selected financial and operational information related to the residential mortgage and title activities of our Financial Services segment:

			Three Months Ended
(Dollars in thousands)			February 28, 2025						February 29, 2024
Dollar value of mortgages originated			$	4,443,000					4,111,000
Number of mortgages originated			12,200						11,500
Mortgage capture rate of Lennar homebuyers			85%						85%
Number of title and closing service transactions			18,200						17,800

At February 28, 2025 and November 30, 2024, the carrying value of Financial Services' commercial mortgage-backed securities was $134.4 million and $135.6 million, respectively. Details of these securities and related debt are disclosed in Note 3 of the Notes to Condensed Consolidated Financial Statements.

Multifamily Segment

We have been actively involved, primarily through unconsolidated funds and joint ventures, in the development, construction and property management of multifamily rental properties. Our Multifamily segment focuses on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets.

The following table provides information related to our investment in the Multifamily segment:

Balance Sheets
(In thousands)			February 28, 2025						November 30, 2024
Multifamily investments in unconsolidated entities			$	472,668					503,303
Lennar's net investment in Multifamily			1,125,271						1,116,295

During the second half of fiscal 2024, the LMV I partners decided to liquidate and sell all of its 38 rental operation projects of LMV I as the fund has come to the end of its contractual life. During the year ended November 30, 2024, 33 LMV I rental operation projects were sold to various third-party buyers. As of February 28, 2025, two additional LMV I rental operation projects were sold to various third-party buyers.

Lennar Other Segment

Our Lennar Other segment includes fund investments we retained subsequent to our sale of the Rialto investment and asset management platform, as well as strategic investments in technology companies that are looking to improve the homebuilding and financial services industries to better serve homebuyers and homeowners and increase efficiencies. At February 28, 2025 and November 30, 2024, we had $824.2 million and $894.9 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $375.4 million and $379.4 million, respectively. The investments in equity securities of Blend Labs, Inc. (“Blend Labs”), Hippo Holdings, Inc. (“Hippo”), Opendoor Technologies, Inc. (“Opendoor”), SmartRent, Inc. (“SmartRent”), Sonder Holdings, Inc. (“Sonder”), and Sunnova Energy International, Inc. (“Sunnova”) are carried at market and will therefore change depending on the market value of our shareholdings in those entities on the last day of each quarter. All of the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. Details of these investments are included within Note 3 of the Notes to Condensed Consolidated Financial Statements. The following is a detail of Lennar Other realized and unrealized gains (losses) from sales of shares and mark-to-market adjustments on our publicly traded technology investments:

			Three Months Ended
(In thousands)			February 28, 2025						February 29, 2024
Blend Labs (BLND)			$	(3,737)					2,936
Hippo (HIPO)			(12,890)						16,449
Opendoor (OPEN)			(18,786)						1,315
SmartRent (SMRT)			(4,483)						(1,963)
Sonder (SOND)			(19)						51
Sunnova (NOVA)			(22,588)						(23,925)
Lennar Other realized and unrealized losses from technology investments (1)			$	(62,503)					(5,137)

(1)During the three months ended February 28, 2025, we realized a loss of $28.4 million on the sale of our shares in Blend Labs, SmartRent, Sonder and Sunnova and, as of February 28, 2025, have a small remaining interest in Sunnova.

(2) Financial Condition and Capital Resources

At February 28, 2025, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $2.6 billion, compared to $5.0 billion at November 30, 2024 and $5.3 billion at February 29, 2024.

We finance all of our activities, including homebuilding, financial services, multifamily, other and general operating needs, primarily with cash generated from our operations, debt issuances and cash borrowed under our warehouse lines of credit and our unsecured revolving credit facility (the “Credit Facility”). At February 28, 2025, we had $2.3 billion of homebuilding cash and cash equivalents and no outstanding borrowings under our $3.0 billion revolving credit facility, thereby providing approximately $5.3 billion of available capacity.

Operating Cash Flow Activities

During the three months ended February 28, 2025 and February 29, 2024, cash (used in) provided by operating activities totaled ($289) million and $368 million, respectively. During the three months ended February 28, 2025, cash used in operating activities was impacted by an increase in inventories due to strategic land purchases, land development and construction costs of $513 million, an increase in deposits and pre-acquisition costs on real estate of $758 million as we increased the percentage of controlled homesites primarily as a result of option contracts with Millrose Properties, Inc. ("Millrose"), and a decrease in accounts payable and other liabilities of $215 million. This was offset by our net earnings and a decrease in loans held-for-sale of $445 million primarily related to the sale of loans originated by our Financial Services segment.

During the three months ended February 29, 2024, cash provided by operating activities was impacted primarily by our net earnings, a decrease in loans held-for-sale of $54 million primarily related to the sale of loans originated by our Financial Services segment and a decrease in receivables of $379 million primarily related to a decrease in Financial Services receivables, net, which are loans sold to investors for which we have not yet been paid. This was partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of $285 million, an increase in deposits and pre-acquisition costs on real estate of $411 million as we increased the percentage of controlled homesites, and a decrease in accounts payable and other liabilities of $326 million.

Investing Cash Flow Activities

During the three months ended February 28, 2025 and February 29, 2024, cash provided by (used in) investing activities totaled $21 million and ($148) million, respectively. During the three months ended February 28, 2025, our cash provided by investing activities was primarily due to $233 million received from the sale of an investment in a joint venture, $72 million

proceeds from the sale of investments and distributions of capital from unconsolidated entities of $35 million, which primarily included (1) $15 million from Homebuilding unconsolidated entities, (2) $17 million from Multifamily entities and (3) $4 million from our Lennar Other unconsolidated entities. This was partially offset by the $231 million acquisition of Rausch Coleman Homes ("Rausch"), net of cash acquired. In addition, we had cash contributions of $79 million to unconsolidated entities, which included (1) $67 million to Homebuilding unconsolidated entities, (2) $4 million to Lennar other unconsolidated entities and (3) $8 million to Multifamily unconsolidated entities and $56 million of net additions of operating properties and equipment.

During the three months ended February 29, 2024, our cash used in investing activities was primarily due to cash contributions of $118 million to unconsolidated entities, which included (1) $56 million to Homebuilding unconsolidated entities, (2) $54 million to Lennar Other unconsolidated entities, and (3) $7 million to Multifamily unconsolidated entities. This was partially offset by distributions of capital from unconsolidated entities of $35 million, which primarily included (1) $23 million from Homebuilding unconsolidated entities, (2) $8 million from our Lennar Other unconsolidated entities, and (3) $4 million from Multifamily entities.

Financing Cash Flow Activities

During the three months ended February 28, 2025 and February 29, 2024, cash used in financing activities totaled $2.1 billion and $1.5 billion, respectively. During the three months ended February 28, 2025, cash used in financing activities was primarily due to (1) $534 million of net repayments under our Financial Services' warehouse facilities; (2) $416 million net cash in connection with Millrose spin-off; (3) $256 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks; (4) $775 million of repurchases of our common stock, which included $710 million of repurchases under our repurchase program and $65 million of repurchases related to our equity compensation plan; and (5) $132 million of dividend payments.

During the three months ended February 29, 2024, cash used in financing activities was primarily due to (1) $600 million of net repayments under our Financial Services' warehouse facilities; (2) $595 million of repurchases of our common stock, which included $512 million of repurchases under our repurchase program and $84 million of repurchases related to our equity compensation plan; (3) $139 million of dividend payments; and (4) $185 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.

Debt to total capital ratios are financial measures commonly used in the homebuilding industry and are presented to assist in understanding the leverage of our homebuilding operations. Homebuilding debt to total capital and net Homebuilding debt to total capital are calculated as follows:

(Dollars in thousands)			February 28, 2025						November 30, 2024						February 29, 2024
Homebuilding debt			$	2,211,272					2,258,283						2,830,332
Stockholders’ equity			22,728,038						27,870,135						26,647,835
Total capital			$	24,939,310					30,128,418						29,478,167
Homebuilding debt to total capital			8.9		%				7.5		%				9.6		%
Homebuilding debt			$	2,211,272					2,258,283						2,830,332
Less: Homebuilding cash and cash equivalents			2,283,928						4,662,643						4,950,128
Net Homebuilding debt			$	(72,656)					(2,404,360)						(2,119,796)
Net Homebuilding debt to total capital (1)			(0.3)		%				(9.4)		%				(8.6)		%

(1)Net homebuilding debt to total capital is a non-GAAP financial measure defined as net homebuilding debt (homebuilding debt less homebuilding cash and cash equivalents) divided by total capital (net homebuilding debt plus stockholders' equity). We believe the ratio of net homebuilding debt to total capital is a relevant and a useful financial measure to investors in understanding the leverage employed in homebuilding operations. However, because net homebuilding debt to total capital is not calculated in accordance with GAAP, this financial measure should not be considered in isolation or as an alternative to financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement our GAAP results.

At February 28, 2025, Homebuilding debt to total capital was higher compared to November 30, 2024, primarily as a result of a decrease in stockholders' equity due to the spin-off of Millrose and share repurchases, partially offset by net earnings and a decrease in Homebuilding debt due to debt paydowns. At February 28, 2025, Homebuilding debt to total capital was lower compared to February 29, 2024, primarily as a result of a decrease in stockholders' equity due to the spin-off of Millrose and share repurchases, partially offset by net earnings and a decrease in Homebuilding debt due to debt paydowns.

We are continually exploring various types of transactions to manage our leverage and liquidity positions, take advantage of market opportunities and increase our revenues and earnings. These transactions may include the issuance of additional indebtedness, the repurchase of our outstanding indebtedness, the repurchase of our common stock, the acquisition of homebuilders and other companies, the purchase or sale of assets or lines of business, the issuance of common stock, strategic transactions to accelerate our land light strategy or securities convertible into shares of common stock, and/or the pursuit of other financing alternatives. In connection with some of our non-homebuilding businesses, we are also considering other types of transactions such as sales, restructurings, joint ventures as we continue to move towards being a pure play homebuilding company.

On February 7, 2025, we successfully completed the taxable spin-off of Millrose from Lennar through a distribution of approximately 80% of Millrose's stock to our stockholders. We will temporarily retain, but will not vote, the remaining 20% of the total outstanding shares of Millrose common stock, which we expect to dispose of through a subsequent spin-off, split-off, public offering, private sale or any combination of these potential transactions later in the year. In connection with the spin-off, we contributed to Millrose $5.6 billion in land assets and cash of $1.0 billion, which included $584 million of cash deposits related to option contracts. The spin-off transaction accelerates our longstanding strategy of becoming a pure-play, asset-light, new home manufacturing company.

On February 10, 2025, we acquired Rausch, a residential homebuilder based in Fayetteville, Arkansas. We acquired Rausch’s homebuilding operations while Millrose acquired Rausch's land assets and we have options on the land. With this acquisition, we have expanded our footprint into new markets in Arkansas (Bentonville/Fayetteville, Little Rock and Jonesboro), Oklahoma (Tulsa and Stillwater), Alabama (Birmingham and Tuscaloosa), and Kansas/Missouri (Kansas City), while adding to its existing footprint in Texas (Houston and San Antonio), Oklahoma (Oklahoma City), Alabama (Huntsville) and Florida (Gulf Coast).

Our Homebuilding senior notes and other debt payable as well as letters of credit and surety bonds are summarized within Note 8 of the Notes to Condensed Consolidated Financial Statements. Our Homebuilding average debt outstanding and the average rates of interest was as follows:

			Three Months Ended
(Dollars in thousands)			February 28, 2025						February 29, 2024
Homebuilding average debt outstanding			$	2,236,667					$	2,839,363
Average interest rate			4.8%						4.8%
Interest incurred			$	31,489					36,511

The maximum available borrowings on our Credit Facility were as follows:

(In thousands)						February 28, 2025
Commitments - maturing in May 2027						$	225,000
Commitments - maturing in November 2029						2,800,000
Total commitments						$	3,025,000
Accordion feature						475,000
Total maximum borrowings capacity						$	3,500,000

The proceeds available under the Credit Facility, which are subject to specified conditions for borrowing, may be used for working capital and general corporate purposes. During the three months ended February 28, 2025, we received an additional $150 million in commitments. The Credit Facility also provides that up to $477.5 million in commitments may be used for letters of credit. The maturity, debt covenants and details of the Credit Facility are unchanged from the disclosure in our Financial Condition and Capital Resources section in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024. In addition to the Credit Facility, we have other letter of credit facilities with different financial institutions.

Under the agreement governing our Credit Facility, we are required to maintain a minimum consolidated tangible net worth, a maximum leverage ratio and either a liquidity or an interest coverage ratio. These ratios are calculated per the Credit Facility agreement, which involves adjustments to GAAP financial measures. We believe we were in compliance with our debt covenants as of February 28, 2025. The following summarizes our debt covenant requirements and our actual levels or ratios with respect to those covenants as calculated per the Credit Facility agreement as of February 28, 2025:

(Dollars in thousands)			Covenant Level						Level Achieved as of February 28, 2025
Minimum net worth test			$	10,000,000					16,321,992
Maximum leverage ratio			60.0%						4.6%
Liquidity test			1.00						(226.00)

Financial Services Warehouse Facilities

Our Financial Services segment uses residential mortgage loan warehouse facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to us and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial warehouse facilities finance LMF Commercial loan origination and securitization activities and are secured by up to 80% interests in the originated commercial loans financed. These facilities and the related borrowings and collateral are detailed in Note 3 of the Notes to Condensed Consolidated Financial Statements.

Changes in Capital Structure

In January 2024, our Board of Directors authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock. Repurchases are authorized to be made in open-market or private transactions. The repurchase authorization has no expiration date. At February 28 2025, we have a remaining authorization to repurchase $2.7 billion in value of our Class A or B common stock. The details of our Class A and Class B common stock repurchases under the authorized repurchase program for the three months ended February 28, 2025 and February 29, 2024 are included in Note 5 of the Notes to Condensed Consolidated Financial Statements.

During the three months ended February 28, 2025, treasury shares increased by 5.8 million shares primarily due to our repurchase of 5.2 million shares of Class A and Class B common stock through our stock repurchase program. During the three months ended February 29, 2024, treasury shares increased by 3.6 million shares primarily due to our repurchase of 3.4 million shares of Class A and Class B common stock through our stock repurchase program.

On February 7, 2025, we distributed a stock dividend consisting of 120,980,401 shares of Millrose Class A common stock outstanding and 11,819,811 shares of Millrose Class B common stock outstanding (representing approximately 80% of the total outstanding shares of Millrose common stock) to each holder of Lennar Class A or Class B common stock as of the close of business on January 21, 2025, the record date of the Millrose spin-off.

On February 12, 2025, we paid a quarterly cash dividend of 0.50 per share for both our Class A and Class B common stock to holders of record at the close of business day January 29, 2025. We approved and paid cash dividends of $0.50 per share for each of the four quarters of 2024 for both its Class A and Class B common stock.

Based on our current financial condition and credit relationships, we believe that our operations and borrowing resources will provide for our current and long-term capital requirements at our anticipated levels of activity.

Supplemental Financial Information

Currently, certain of our 100% owned subsidiaries, which are primarily homebuilding subsidiaries, are guaranteeing all our senior notes. The guarantees are full and unconditional.

The indentures governing our senior notes require that, if any of our 100% owned subsidiaries, other than our finance company subsidiaries and foreign subsidiaries, directly or indirectly guarantee at least $75 million principal amount of debt of Lennar Corporation (other than senior notes), those subsidiaries must also guarantee Lennar Corporation’s obligations with regard to its senior notes. Included in the following tables as part of “Obligors” together with Lennar Corporation are subsidiary entities that are not finance company subsidiaries or foreign subsidiaries and were guaranteeing the senior notes because at February 28, 2025 they were guaranteeing Lennar Corporation's letter of credit facilities and its Credit Facility, disclosed in Note 8 of the Notes to Condensed Consolidated Financial Statements. The guarantees are full, unconditional and joint and several and the guarantor subsidiaries are 100% directly or indirectly owned by Lennar Corporation. A subsidiary's guarantee of Lennar senior notes will be suspended at any time when it is not directly or indirectly guaranteeing at least $75 million principal amount of debt of Lennar Corporation (other than senior notes), and a subsidiary will be released from its guarantee and any other obligations it may have regarding the senior notes if all or substantially all its assets, or all of its capital stock, are sold or otherwise disposed.

Supplemental information for the Obligors, which excludes non-guarantor subsidiaries and intercompany transactions, at February 28, 2025 is included in the following tables. Intercompany balances and transactions within the Obligors have been eliminated and amounts attributable to the Obligors' investment in consolidated subsidiaries that have not issued or guaranteed the senior notes have been excluded. Amounts due from and transactions with nonobligor subsidiaries and related parties are separately disclosed:

(In thousands)			February 28, 2025						November 30, 2024
Due from non-guarantor subsidiaries			$	13,932,597					18,396,060
Equity method investments			2,356,934						1,078,635
Total assets			40,401,865						50,251,091
Total liabilities			9,407,173						10,067,424

			Three Months Ended
(In thousands)			February 28, 2025
Total revenues			$	7,005,631
Operating earnings			794,557
Earnings before income taxes			632,631
Net earnings attributable to Lennar			477,240

Off-Balance Sheet Arrangements

We regularly monitor the results of our Homebuilding, Multifamily and Lennar Other unconsolidated joint ventures and any trends that may affect their future liquidity or results of operations. We also monitor the performance of joint ventures in which we have investments on a regular basis to assess compliance with debt covenants. For those joint ventures not in compliance with the debt covenants, we evaluate and assess possible impairment of our investments. We believe that substantially all of the joint ventures were in compliance with applicable debt covenants at February 28, 2025.

Homebuilding: Investments in Unconsolidated Entities

As of February 28, 2025, we had equity investments in 53 active Homebuilding and land unconsolidated entities (of which 5 had recourse debt, 14 had non-recourse debt and 34 had no debt) and 51 active Homebuilding and land unconsolidated entities at November 30, 2024. Historically, we have invested in unconsolidated entities that acquired and developed land (1) for our homebuilding operations or for sale to third parties or (2) for the construction of homes for sale to third-party homebuyers. Through these entities, we have primarily sought to reduce and share our risk by limiting the amount of our capital invested in land, while obtaining access to potential future homesites and allowing us to participate in strategic ventures. The use of these entities also, in some instances, has enabled us to acquire land to which we could not otherwise obtain access, or could not obtain access on as favorable terms, without the participation of a strategic partner. Participants in these joint ventures have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to homesites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large land parcels. Joint ventures with financial partners have allowed us to combine our homebuilding expertise with access to our partners’ capital. Joint ventures with strategic partners have allowed us to combine our homebuilding expertise with the specific expertise (e.g. commercial or infill experience) of our partners. Each joint venture is governed by an executive committee consisting of members from each partner. Details regarding these investments, balances and debt are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.

The following table summarizes the principal maturities of our Homebuilding unconsolidated entities (“JVs”) debt as per current debt arrangements as of February 28, 2025. It does not represent estimates of future cash payments that will be made to reduce debt balances. Many JV loans have extension options in the loan agreements that would allow the loans to be extended into future years.

									Principal Maturities of Unconsolidated JVs by Period
(In thousands)									Total JV Debt						2025						2026						2027						Thereafter						Other
Bank debt without recourse to Lennar									$	1,346,172					244,224						163,692						335,654						602,602						—
Land seller and other debt without recourse to Lennar									59						—						—						—						59						—
Maximum recourse debt exposure to Lennar									44,241						—						12,331						—						31,910						—
Debt issuance costs									(2,430)						—						—						—						—						(2,430)
Total									$	1,388,042					244,224						176,023						335,654						634,571						(2,430)

We own an approximately 40% interest in FivePoint Holdings, LLC., a NYSE listed company, and companies it manages, which own three large multi-use properties in California.

We temporarily hold an approximately 20% investment in the total outstanding shares of Millrose common stock, which we expect to dispose of through a subsequent spin-off, split-off, public offering, private sale or any combination of these potential transactions later in the year.

Multifamily: Investments in Unconsolidated Entities

At February 28, 2025, Multifamily had equity investments in 24 active unconsolidated entities that are engaged in multifamily residential developments (of which 17 had non-recourse debt and 7 had no debt) and 23 active unconsolidated entities at November 30, 2024. We invest in unconsolidated entities that acquire and develop land to construct multifamily rental properties. Through these entities, we are focusing on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. Initially, we participated in building multifamily developments and selling them soon after they were completed. Participants in these joint ventures have been financial partners. Joint ventures with financial partners have allowed us to combine our development and construction expertise with access to our partners’

capital. Each joint venture is governed by an operating agreement that provides significant substantive participating voting rights on major decisions to our partners.

The Multifamily segment includes LMV I, LMV II and Canada Pension Plan Investments Fund, which are long-term multifamily development investment vehicles involved in the development, construction and property management of class-A multifamily assets. Details of each fund as of and during the three months ended February 28, 2025 are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.

The following table summarizes the principal maturities of our Multifamily unconsolidated entities debt as per current debt arrangements as of February 28, 2025. It does not represent estimates of future cash payments that will be made to reduce debt balances.

									Principal Maturities of Unconsolidated JVs by Period
(In thousands)									Total JV Debt						2025						2026						2027						Thereafter						Other
Debt without recourse to Lennar									$	2,458,957					336,420						1,098,001						777,565						246,971						—
Debt issuance costs									(14,295)						—						—						—						—						(14,295)
Total									$	2,444,662					336,420						1,098,001						777,565						246,971						(14,295)

Lennar Other: Investments in Unconsolidated Entities

As part of the sale of the Rialto investment and asset management platform, we retained the right to receive a portion of payments with regard to carried interests if certain funds meet specified performance thresholds. We periodically receive advance distributions related to the carried interests in order to cover income tax obligations resulting from allocations of taxable income to the carried interests. These distributions are not subject to clawbacks but reduce future carried interest payments to which we become entitled from the applicable funds and are recorded as equity in earnings (losses) in the condensed consolidated statement of operations. Our investment in the Rialto funds totaled $136.6 million and $140.1 million as of February 28, 2025 and November 30, 2024, respectively.

As of February 28, 2025 and November 30, 2024, we had strategic technology investments in unconsolidated entities of $238.8 million and $239.3 million, respectively, accounted for under the equity method of accounting. Our strategic technology investments through our LENX business help to enhance the homebuying and homeownership experience, and help us stay at the forefront of homebuilding innovation. Details regarding these investments are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.

Option Contracts

We often obtain access to land through option contracts, which generally enable us to control portions of properties owned by third parties (including land banks) and unconsolidated entities until we have determined whether to exercise the options. Since fiscal year 2020, we have been increasing the percentage of our total homesites that we control through option contracts rather than own.

The table below indicates the number of homesites to which we had access through option contracts with third parties and unconsolidated JVs (i.e., controlled homesites) and homesites owned (excluding homes in inventory):

																																	Years of
February 28, 2025															Controlled Homesites						Owned Homesites						Total Homesites						Supply Owned (1)
East															116,953						1,246						118,199
Central															132,879						4,242						137,121
South Central															172,985						2,214						175,199
West															105,947						3,503						109,450
Other															4,649						1,561						6,210
Total homesites															533,413						12,766						546,179						0.2
% of total homesites															98%						2%

																																	Years of
February 29, 2024															Controlled Homesites						Owned Homesites						Total Homesites						Supply Owned (1)
East															83,792						18,324						102,116
Central															69,738						33,669						103,407
South Central															94,065						19,789						113,854
West															70,746						22,784						93,530
Other															4,828						1,891						6,719
Total homesites															323,169						96,457						419,626						1.3
% of total homesites															77%						23%

(1)Based on trailing twelve months of home deliveries.

Details on option contracts and related consolidated inventory not owned and exposure are included in Note 10 of the Notes to Condensed Consolidated Financial Statements.

Contractual Obligations and Commercial Commitments

Our contractual obligations and commercial commitments have not changed materially from those reported in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024, except for a decrease of $534 million in borrowings under the Financial Services' warehouse repurchase facilities and a decrease of $449 million in land purchase contract obligations.

(3) Recently Adopted Accounting Pronouncements

See Note 1 of the Notes to Condensed Consolidated Financial Statements included under Item 1 of this Quarterly Report on Form 10-Q for a discussion of recently adopted accounting pronouncements.

(4) Critical Accounting Policies

There have been no significant changes to our critical accounting policies during the three months ended February 28, 2025 as compared to those we disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024.